Wednesday, June 27, 2007

A somewhat unified view of decision making: part 1

Basic decision model with 5 stocks: Problems, Latent Problems, Actionable Insight, Insight Quality, and Willingness to Act

Yesterday I promised a series trying to integrate my various thoughts on decision making as I've touched on in this blog before. I'll use this diagram of four stocks, denoted by rectangles, to guide the conversation (click on the image to see a pop-up, full-sized version). Let's start with the stock of Problems. As I'm using it here, those are situations that demand our attention or action. In a Kepner-Tregoe sense, they include both problems and decisions. Problems come at us from out of nowhere, it sometimes seems, and that's why I've represented them as coming out of a cloud. Incidentally, "pa" stands for the Latin "per annum" (per year).

We deal with problems by making decisions. If we make good decisions, problems go away. If we make poor decisions, they become Latent Problems, waiting to visit us again another day. Our capacity (and capability) for making decisions is controlled by a stock of Actionable Insights we or our organizations possess. It's also likely controlled by our willingness to act; I can make a heck of a lot of decisions in a hurry if I resolve them all by rolling a die. Whether we make good or bad decisions is controlled, to a large degree, by the quality of our insights (another stock); luck plays a role, too, as do other actors in the situation.

In this model, most decisions are made relatively rapidly, perhaps using the recognition-primed decision model without our even knowing of it. Increasing our insights and the quality of those insights is something we may do as part of OJT. Sometimes, though, we run up against problems we know we must study before we make our decisions, and so we do something explicit (commission a task force, conduct experiments, hire a consultant, etc.) to increase our Actionable Insights.

If any of you offer your observations, either as comments here or as email, I'll try to take them into account as I prepare the next installment, in which I'll begin to connect up some of the missing links.

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